TaxTMI 
TaxTMI 
1994 (8) TMI 72
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....fficer disallowed 50% of the total expenditure. The assessee appealed. The CIT(A) held that even though no materials were seized pointing to the recoveries made from the theatre owners in respect of these expenses, as the Assessing Officer had only adopted the basis applied by the CIT(A) in the appeal for the asst. yr. 1986-87, there was no reason for interference. Thus, he sustained the disallowance. The assessee is in further appeal for both the years under consideration. 3. We have heard rival submissions and perused the records. The assessee has furnished a paper book consisting of the following documents: (a) Note on advertisement and publicity expenses (b) Extract from the assessment order for asst. yr. 1987-88 (c) Extract from the appellate order for asst. yr. 1987-88 (d) Copy of the affidavit (e) Note on levy under s. 234P (f) Details of Calicut & Ernakulam office expenses. We have gone through the same. It is admitted by both sides that the search that took place on 22nd Nov., 1988 in the business and residential premises of the assessee did not yield any incriminating materials in respect of publicity and entertainment expenses for the calendar yea....
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....r the asst. yr. 1987-88. Based on this proposition, we uphold the following details furnished in the assessee's paper book at pages 4 & 5: . . "Asst.yr Asst. yr. . 1988-89 1989-90 (1) Total No. of 'C' class theatres where films were exhibited during the accounting year 1987 & 1988-89 (x) 169 174 (2) No. of 'C' class theatres who had certified that no recovery has been made for publicity by the appellant (y) 97 97 (3) No. of theatres from where no certificate could be obtained owing to various reasons 72 77 (4) Amount spent towards printing charges of posters 8,26,888 8,60,000 (5) Remaining theatres,, where there could have been recovery. 42.60% of 44.25% of x - y 8,26,888 8,60,000 x 3,52,254 3,80,550 (6) 50% as fixed by the CIT for earlier years" The learned Departmental representative who went through the computation did not seriously dispute the workings though he had reservations about the quantum of disallowance. In the light of the fact that the recoveries are from 'C' class theatres, we are inclined to accept the manner of computation of disallowance as given in the above working. It ....
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.... restricted the disallowance to Rs. 40,000. 6. Having heard the rival submissions, we grant further relief of Rs. 10,000 on estimate basis. 7. The assessee objects to the levy of interest under s. 139(8), 215 and 216 of the IT Act 1961 for the asst. yr. 1988-89. The CIT(A) declined to entertain the ground for the reason that there was no total denial of liability. In our considered opinion, there is no infirmity in the order of the CIT(A). However, the Assessing Officer is directed to amend the quantum of interest leviable under these sections upon final determination of income and tax thereon after giving an opportunity of being heard to the assessee in view of the decision of the Supreme Court that levy of interest partakes of the nature of substantive law and not adjectival law [J.K. synthetics Ltd. vs. CTO (1994) 119 CTR (SC) 222.]. 8. In the appeal for the asst. yr. 1989-90 the grievance of the assessee is against the disallowance of water charges of Rs. 13,369. Admittedly, the payment related to the liability incurred in the earlier assessment years but was paid in the impugned assessment year. It is not the case before us that the demand notice for water charges was....
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....dt. 31st Jan., 1990 filed copies of revised P&L a/c and balance sheets duly supported by a report of the auditor under s. 44AB of the IT Act in respect of the business of Sunitha Productions. A revised computation showing the total income at Rs. 30,92,020 was also filed. In response to the notice under s. 143(2) the assessee's representative Shri D.S. Sreekumaran, advocate appeared and produced the books of account which were examined". From the assessment order, it is not clear whether the return filed by the assessee was processed under s. 143(1)(a) of the IT Act making, prima facie, adjustments to the returned income as a result whereof additional tax was levied under s. 143(1A). Additional tax was levied in a sum of Rs. 58,267. In case processing of the return was not made under s. 143(1)(a) of the IT Act making a, prima facie, adjustment, we hold that the levy of additional tax for the first time in a regular assessment under s. 143(3) of the IT Act would not be justified. As the facts are not clear from the assessment order, the issue is restored to the Assessing Officer. He is directed to give on opportunity to the assessee before deciding the issue. We may also point out....
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....g seized under s. 132 of the IT Act. Yet it was seized. We uphold his contention in view of the decision in Bhagwan Das Narayan Das vs. CIT (1975) 98 ITR 194 (Guj) wherein it has been explained that fixed deposit receipts are not includible in the category of assets mentioned in s. 132(5) of the IT Act. However, a prohibitory order under s. 132(2) of the IT Act had been served on the Managers of the Banks prohibiting them from realising the fixed deposit receipts. This order has been passed on 22nd Nov., 1988 by authorised officer under s. 132. Thus, in this case, there has been seizure of fixed deposits, though not an "asset" mentioned under s. 132(5) but at the same time a prohibitory order against the bankers in respect of the deposits was validly passed under s. 132(3). As a result of this step taken by the Revenue, the assessee was deprived of the funds to pay advance tax. His request to the authorities as detailed above to appropriate the proceeds towards advance tax payment was not acted upon. In the circumstances, the deficiency arose in the payment of advance tax. Now the question is whether interest can be levied under s. 234B and 234C of the IT Act. Shri Prasad's argumen....